Toyota to Substantially Raise Prices to Offset Financial Losses
Toyota had some bad news for car shoppers this week when it discussed its Q3 results, which included an operating loss in the North American region.
New-vehicle prices are going to increase substantially in the near future, on both sides of the Atlantic, in order to make up for declining profits caused by higher costs at the supply and production levels. How much? Well, there’s no easy answer.
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"We are really racking our brains trying to come up with the appropriate pricing level," said Jun Nagata, Chief Communications Officer at Toyota. "We have begun to reflect those higher prices into the vehicle as much as possible."
In other words, inflation is not over yet, and either more aggressive action or more frequent increases are likely needed.
"Every year, we have been changing prices once or twice a year, and by increasing the frequency of pricing changes, we would like to reflect those higher costs," said Masahiro Yamamoto, head of the accounting group.
The challenge for Toyota, just like every other automaker, is to find a balance between production costs and customers’ expectations. No one in Canada would be interested in a Corolla that starts at around $30,000, at least not now.
By the way, the outgoing 2022 Corolla Sedan has a base price of $21,669 including destination. Pricing for the revised 2023 model, which drops the standard manual transmission, is not available yet, but we know that the 2023 Corolla Hatchback and 2023 Corolla Hybrid cost a minimum of $25,569 and $28,309, respectively.
Toyota expects to build 9.2 million vehicles globally during the fiscal year that ends on March 31, 2023, half a million fewer units than its original forecast.
